Uranium Price Change Not Expected Soon由CR


"Industry fundamentals remain strong. . . underpinning support for the contract uranium price. . ."

The latest research report from Resource Capital Research shows that a key leading uranium price indicator is currently at US$47.50/lb, indicating there is no significant price change anticipated by the market in the near term.

This Fund Implied Price (FIP) indicator currently carries the same valuation as the spot price for uranium.

Since the beginning of July, the FIP has traded in a range from ~US$44/lb to ~US$52/lb. This is up from US$35/lb at the end of March.

RCR's report of global uranium companies reveals that traders are focused on the uranium supply side with the possibility of increased DOE liquidations leading to modest downside pressure.

"We expect equity performance in the sector will be driven by broader equity market trends in the coming months, and in relation to specific stocks, the achievement of significant project milestones," said John Wilson, managing director of RCR.

Industry fundamentals remain strong, said RCR, underpinning support for the contract uranium price, with anticipated growth in nuclear reactors and risk of supply shortage midterm (4-8 years).

The long-term contract uranium price is US$65.00/lb down from US$70/lb in December 2008, and relatively stable since peaking at US$95/lb from May 2007 to March 2008.

RCR said the strong uranium production increases continue in Namibia and Kazakhstan.

The Merrill Lynch Uranium Equity Index is down 4% over the past month, down 6% over three months and up 125% from the recent low reached on October 27th last year.

The market valuation of Australian companies with one or more uranium projects is up 11% over the past month, up 24% over the past three months, and down 6% over the past 12 months.

This compares with Canadian companies with one or more uranium projects, up 9% over the past month and down 26% over the past 12 months, according to RCR.

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